If you’re buying an apartment in NYC, you will be obligated to pay monthly fees to a Homeowners Association, or HOA. HOAs are generally responsible for the upkeep of the building in which your apartment is located. They often place restrictions on things such as when you can move in or out and whether or not you can rent out your unit. HOAs in New York City can be a little confusing, so it’s important you understand what you’re getting into before buying a home. Here’s the 411.
When you’re determining how much you can afford to spend on an apartment in NYC, you must take into consideration the HOA fees. In many listings, these will be referred to as “maintenance fees” or “common charges” and the average monthly expense is around $1,500. These fees are paid in addition to your monthly mortgage payments.
What the fees cover
These monthly maintenance charges cover all the necessary operating costs of your building. This can include shared amenities like a fitness center, rooftop deck, or pool. It also includes the salaries of any staff your building employs, such as a doorman or superintendent. These charges also represent utility costs for common areas, such as the lobby and hallways. The more luxurious your building’s amenities are, the higher your monthly fees will be. The cost is also determined by whether or not you’re buying a co-op or a condo.
Fees for condos
Monthly common charges for condos tend to be lower than those for co-ops. When you purchase a condo, you are purchasing real estate, which means you own that space contained within the unit. You pay taxes individually on that property, so taxes do not figure into your monthly common charges. Your fees will also include special assessments from time to time. As with any building, there will periodically be necessary repairs, such as new carpeting for the hallways or a new boiler for the building. In these cases, owners in the building will be on the hook for that extra expense, which is usually spread out over several months.
Fees for co-ops
Co-ops tend to have higher maintenance fees because of the unique nature of the ownership. Instead of purchasing real estate, owners of co-ops are purchasing shares in a corporation. The number of shares you have relates to the size and location of your apartment within the building. Your fees are determined based on the number of shares you own. Unlike a condo where the owner is billed individually for taxes, in a co-op, the entire corporation owns the building and is taxed accordingly. Those taxes are then passed on to the owners via the monthly HOA fees. Be aware that the portion of your fee that covers real estate taxes can be deducted.
The bottom line
HOAs provide necessary services in all buildings in NYC, so it’s not unreasonable that they collect fees for these services. When you’re purchasing a home in NYC, be sure to educate yourself upfront about the associated fees for the apartment so they don’t come as a surprise when you move in.
Contact Platinum Properties today
If you’re interested in a buying a home in New York City, then click here or call 646-681-5272 to speak with an agent from Platinum Properties. We’re always available to answer your questions and help you with every step of the real estate process.